Published 5:12 pm, Wednesday, September 9, 2009

The recovery is expected to come more quickly than after the last major oil bust in 1980, when demand took a decade to reach its 1979 level, because developing nations such as China and India are still primed for growth, said Jim Burkhard, managing director of global oil research for the firm.

Growing populations in those countries continue to become more affluent, as shown by projections that new-car sales in China will top U.S. sales this year.

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"What's changed in a generation is the regional composition in demand growth," Burkhard said Tuesday.

But once demand for oil tops the record, it's expected to grow more slowly than it did before the recession, thanks to flat or even declining demand in the developed nations.

U.S. gasoline consumption is unlikely ever to top its 2007 peak, Burkhard said, because of laws requiring more ethanol in gasoline and tougher fuel economy standards.

In Europe, a shift to diesel-powered cars and light-duty trucks also has led to recent drops in oil demand. Aging populations in Europe and Japan also use less fuel.

CERA predicts 2010 demand will grow by 900,000 barrels to 84.6 million barrels. By 2012, demand should reach 86.9 million barrels, and by 2014, CERA predicts 88.9 million barrels.

The recovery from the 1980s demand crash took 10 years because prices remained high and consumers found substitutes for oil.

"In the 1980s, the largest area of demand decline came from power generation, where oil was replaced by readily available substitutes like coal, gas or nuclear," Burkhard said. "Today, global demand growth comes from the transportation sector in emerging markets where there are fewer options for switching fuels."